Tesla Inc. shares fell Monday for a fifth straight session, part of a selloff that has knocked more than a quarter of a trillion dollars off the company’s market cap in a little more than a month.
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Tesla has also entered its third bear market — defined as a drop of 20% or more from a recent high — in the past year, after steep selloffs in September and March 2020. Still, the electric-auto maker’s volatile shares are up more than 360% over the past 12 months.
Tech stocks in general have been hit hard in recent weeks, with the Nasdaq Composite COMP,
One reason is a global chip shortage that has impacted auto makers’ supply lines. In February, Tesla briefly shut down its factory in Fremont, Calif., which CEO Elon Musk blamed on a “parts shortage.” CNet reported Monday that customers buying Model 3 and Model Y vehicles face a months-long backlog for delivery.
Rising interest rates have also taken a toll, as high-growth companies such as Tesla depend on future cash, which is devalued as rates rise. One estimate by Barron’s found that, as an admittedly simplified example, every 1% rise in interest rates hurts Tesla’s value by about $200 billion.
See: Tesla is cratering. This is how much interest rates hurt
Tesla shares closed Monday at about $568 a share, below the $616 average target price by analysts tracked by FactSet.
ARK Investment founder Cathie Wood has said her firm will soon give a new price target for Tesla shares, but she said Monday she’s still bullish on the company.
“Our confidence in Tesla has gone up for a number of reasons,” Wood said in an interview on CNBC’s “Closing Bell,” citing Tesla’s market share and progress in autonomous driving.
